topic Re: Credit Score Impact in Understanding FICO® Scoring

Credit Score Impact

Anonymous — Thu, 21 Jun 2007 00:29:35 GMT

Currently my credit scores are mid 600's the negatives per myfico is because I had credit cards that were all close to the limit, no other issues. I recently got approved for a consolidation loan, I am assuming this will help my credit score in the next 4-6 months since my resource utilization will be 0%? Thanks

Re: Credit Score Impact

Tuscani — Thu, 21 Jun 2007 12:02:33 GMT

Define "consolidation loan". Was this a personal loan, HELOC, ect.?

Re: Credit Score Impact

Anonymous — Thu, 21 Jun 2007 12:34:04 GMT

Personal loan; so installment

Re: Credit Score Impact

smallfry — Thu, 21 Jun 2007 13:21:59 GMT

@Anonymous wrote:
Personal loan; so installment

Revolving will improve but you will most likely see installment debt too high since once the account is opened it will be totally utilized. Better scenario for your scores though.

Re: Credit Score Impact

fused — Fri, 22 Jun 2007 20:15:39 GMT

@smallfry wrote:

@Anonymous wrote:
Personal loan; so installment

Revolving will improve but you will most likely see installment debt too high since once the account is opened it will be totally utilized. Better scenario for your scores though.

I disagree! The OP states his cc's are near maxed out. If he/she takes the money from the loan and pay the cc's as close as possible to 1-9% util, there should be a sizable score increase. In my experience with new installment loans, I hardly suffered a drop in scores. Util on revolving TLs carries much more weight than on installment TLs.

Re: Credit Score Impact

smallfry — Fri, 22 Jun 2007 21:11:04 GMT

@fused111 wrote:

@smallfry wrote:

@Anonymous wrote:
Personal loan; so installment

Revolving will improve but you will most likely see installment debt too high since once the account is opened it will be totally utilized. Better scenario for your scores though.
I disagree! The OP states his cc's are near maxed out. If he/she takes the money from the loan and pay the cc's as close as possible to 1-9% util, there should be a sizable score increase. In my experience with new installment loans, I hardly suffered a drop in scores. Util on revolving TLs carries much more weight than on installment TLs.

No doubt. My point was he will most certainly see that comment on his reports. His score should go up though I agree. My new car loan forces the installment debt too high comment because it is new and by virtue of that fact is nearly totally utilized. If I paid a good portion down on the car loan I am sure that I wouldn't get that message.

Re: Credit Score Impact

fused — Fri, 22 Jun 2007 21:30:21 GMT

@smallfry wrote:

@fused111 wrote:

@smallfry wrote:

@Anonymous wrote:
Personal loan; so installment

Revolving will improve but you will most likely see installment debt too high since once the account is opened it will be totally utilized. Better scenario for your scores though.
I disagree! The OP states his cc's are near maxed out. If he/she takes the money from the loan and pay the cc's as close as possible to 1-9% util, there should be a sizable score increase. In my experience with new installment loans, I hardly suffered a drop in scores. Util on revolving TLs carries much more weight than on installment TLs.

No doubt. My point was he will most certainly see that comment on his reports. His score should go up though I agree. My new car loan forces the installment debt too high comment because it is new and by virtue of that fact is nearly totally utilized. If I paid a good portion down on the car loan I am sure that I wouldn't get that message.

I use to pay attention to comments like that but they seem meaningless. Even with comments like the one you are mentioning, they do not impact scores, well FICO scores that is. I just ignore the comments, especially the one's at TC.

Re: Credit Score Impact

smallfry — Fri, 22 Jun 2007 22:24:55 GMT

I don't even look at the FAKO scores at all. I think FICO likes to see installments but doesn't really reward them too much.

Re: Credit Score Impact

fused — Sat, 23 Jun 2007 00:18:05 GMT

smallfry wrote:
I don't even look at the FAKO scores at all. I think FICO likes to see installments but doesn't really reward them too much.

They will slowly, if you pay on time for years.

Re: Credit Score Impact

Anonymous — Sat, 23 Jun 2007 01:21:26 GMT

@fused111 wrote:

@smallfry wrote:
I don't even look at the FAKO scores at all. I think FICO likes to see installments but doesn't really reward them too much.
They will slowly, if you pay on time for years.

Yep, you are rewarded over time. I would like to add one more thing. The OP might also see a small lift or rebound in score after 60 days of opening the installment if the OP looses (does not always happen) points for opening a new account. So you might get more after you think you got lots, which could be lots more.